Friday, June 27, 2008

A federal investigation into the City Council’s appropriation of funds to fictitious groups should conclude within 90 days, a prosecutor said on Thursday.

But the prosecutor, Rua M. Kelly, an assistant United States attorney who spoke at a hearing in State Supreme Court in Manhattan to determine whether the court would hold a separate public inquiry, did not indicate whether anyone would be charged.

Federal investigators have been conducting a grand jury investigation into the City Council’s appropriation of discretionary funds to community groups.

Ms. Kelly asked Justice Joan B. Lobis of State Supreme Court in Manhattan to delay any public inquiry for 90 days if she does indeed grant it.

Holding a judicial inquiry before the federal investigation is complete would make it virtually impossible for the authorities to prosecute anyone because testimony from the inquiry is not permissible in a criminal proceeding, Ms. Kelly said. That means that federal prosecutors would have to show that their evidence came from somewhere other than the inquiry, Ms. Kelly said.

“We think that 90 days would absolutely suffice to allow our investigation to go forward,” she said.

Justice Lobis, who did not rule on Thursday, is expected to submit a written decision in the next few weeks. The judge did indicate that she would not do anything to compromise the federal investigation.

The inquiry being sought is known as a judicial summary inquiry, and it comes from a rarely used section of the City Charter. The section, 1109, was created in 1873, a product of the Boss Tweed era, when the New York politician William M. Tweed bilked the city of hundreds of millions of dollars.

The civil rights lawyer Norman Siegel is requesting the inquiry on behalf of eight New York taxpayers. The inquiry would not determine guilt or innocence, but would merely lay out the facts surrounding the case for public review.

Mr. Siegel said he was fine with a 90-day stay and, in fact, welcomed Ms. Kelly’s news that the federal investigation was nearing completion.

“New Yorkers anxiously await the result of that criminal investigation,” Mr. Siegel said outside the courtroom.

Mr. Siegel said he thought that at the very least, a crime was committed by presenting fictitious charities in documents.

“Someone intentionally designed this scheme,” he said. “It was no mistake.”

Stephen Kitzinger, a lawyer for the city, said he believed Mr. Siegel’s request for a public inquiry was motivated by his desire to run for public advocate, an office he has sought twice before, in 2001 and 2005.

“It would appear that this is a publicity stunt designed to promote a campaign,” Mr. Kitzinger said in court.

Mr. Siegel denied that contention.By JOHN ELIGONPublished: June 27, 2008 New York Times